Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 30365 

as appropriate, security accreditation and a 

need-to-know; and 

(2) Nongovernmental U.S. entities 

registered with the Department of State and 

eligible to export defense articles under U.S. 

law and regulation, including their 

employees, with, as appropriate, security 

accreditation and a need-to-know. 

U.S. DoD Treaty-eligible requirements 

means any defense article acquired by DoD 

for use in a combined military or 

counterterrorism operation, cooperative 

research, development, production, or 

support program, or DoD end use, as 

described in Article 3 of the Treaty and 

Sections 2 and 3 of the Implementing 

Arrangement. 

(b) All contract line items in this contract, 

except any identified in this paragraph, are 

intended to satisfy U.S. DoD Treaty-eligible 

requirements. Specific defense articles 

exempt from Treaty eligibility will be 

identified in those contract line items that are 

otherwise Treaty-eligible. 

CONTRACT LINE ITEMS NOT INTENDED 

TO SATISFY U.S. DoD TREATY-ELIGIBLE 

REQUIREMENTS: 

lllllllllllllllllllll

[Enter Contract Line Item Number(s) or enter 

‘‘None’’] 

(c) Subject to the other terms and 

conditions of this contract that affect the 

acceptability of foreign sources or foreign end 

products, components, parts, or materials, 

Approved Community members are 

permitted, but not required, to use the Treaty 

for exports or transfers of qualifying defense 

articles in performance of the contract. 

(d) Any conduct by the Contractor that falls 

outside the scope of the Treaty, the 

Implementing Arrangement, and 22 CFR 

126.17(g) is subject to all applicable ITAR 

requirements, including any criminal, civil, 

and administrative penalties or sanctions, as 

well as all other United States statutory and 

regulatory requirements outside of ITAR, 

including, but not limited to, regulations 

issued by the Bureau of Alcohol, Tobacco, 

Firearms and Explosives found at 27 CFR 

Parts 447, 478, and 479, which are unaffected 

by the Treaty. 

(e) If the Contractor is an Approved 

Community member, the Contractor agrees 

that— 

(1) The Contractor shall comply with the 

requirements of the Treaty, the Implementing 

Arrangement, the ITAR, and corresponding 

regulations of the U.S. Government and the 

government of the United Kingdom; and 

(2) Prior to the export or transfer of a 

qualifying defense article, the Contractor— 

(i) Shall mark, identify, transmit, store, and 

handle any defense articles provided for the 

purpose of responding to such solicitations, 

as well as any defense articles provided with 

or developed pursuant to their responses to 

such solicitations, in accordance with the 

Treaty, the Implementing Arrangement, and 

corresponding United States Government and 

the government of the United Kingdom 

regulations including, but not limited to, the 

marking and classification requirements 

described in the applicable regulations; 

(ii) Shall comply with the re-transfer or reexport provisions of the Treaty, this 

Implementing Arrangement, and 

corresponding United States Government and 

the government of the United Kingdom 

regulations, including, but not limited to, the 

re-transfer and re-export requirements 

described in the applicable regulations; and 

(iii) Shall acknowledge that any conduct 

that falls outside or in violation of the Treaty, 

Implementing Arrangement, and 

implementing regulations of the applicable 

government including, but not limited to, 

unauthorized re-transfer or re-export in 

violation of the procedures established in the 

applicable Implementing Arrangement and 

implementing regulations, remains subject to 

applicable licensing requirements of the 

government of the United Kingdom and the 

United States Government, including any 

criminal, civil, and administrative penalties 

or sanctions contained therein. 

(f) The contractor shall include the 

substance of this clause, including this 

paragraph (f), in all subcontracts that may 

require exports or transfers of qualifying 

defense articles in connection with deliveries 

under the contract. 

(End of clause) 

[FR Doc. 2012–11560 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 225 

RIN 0750–AH68 

Defense Federal Acquisition 

Regulation Supplement: Report on 

Waiver of Prohibition on Acquisition 

From Communist Chinese Military 

Companies (DFARS Case 2012–D023) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement the requirement 

in the National Defense Authorization 

Act for Fiscal Year 2012 to report to the 

congressional defense committees 

before issuing a waiver of the 

prohibition on acquisition of United 

States Munitions List items from 

Communist Chinese military 

companies. 

DATES: Effective Date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy G. Williams, Defense Acquisition 

Regulations System, OUSD (AT&L) 

DPAP/DARS, Room 3B855, 3060 

Defense Pentagon, Washington, DC 

20301–3060. Telephone 571–372–6106; 

facsimile 571–372–6094. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1243 of the National Defense 

Authorization Act for Fiscal Year 2012 

(Pub. L. 112–81) requires a report to the 

congressional defense committees not 

less than 15 days before issuing a waiver 

to the requirements of section 1211 of 

the National Defense Authorization Act 

for Fiscal Year 2006 (Pub. L. 109–163), 

implemented at DFARS 225.770, 

Prohibition on acquisition of United 

States Munitions List items from 

Communist Chinese military 

companies. The prior requirement was 

for a report within 30 days after the date 

of the waiver. The final rule also adds 

the requirement to send a copy of the 

report to Defense Procurement and 

Acquisition Policy. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations,’’ 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute requires 

that a procurement policy, regulation, 

procedure, or form (including an 

amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, 

procedure, or form, or has a significant 

cost or administrative impact on 

contractors or offerors. This final rule is 

not required to be published for public 

comment because the rule merely alters 

the timing of the report to the 

congressional defense committees when 

issuing a waiver of the prohibition on 

acquisition of United States Munitions 

List items from Communist Chinese 

military companies, adds the 

requirement to send a copy of the report 

to Defense Procurement and Acquisition 

Policy, and further specifies the 

required contents of the report. These 

requirements affect only the internal 

operating procedures of the 

Government. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 


srobinson on DSK4SPTVN1PROD with RULES2
30366 Federal Register / Vol. 77, No. 99 / Tuesday, May 22, 2012 / Rules and Regulations 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

IV. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because this final 

rule does not constitute a significant 

DFARS revision within the meaning of 

FAR 1.501–1 and 41 U.S.C. 1707 does 

not require publication for public 

comment. 

V. Paperwork Reduction Act 

This final rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget under the 

Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Part 225 

Government procurement. 

Ynette R. Shelkin, 

Editor, Defense Acquisition Regulations 

System. 

Therefore, 48 CFR part 225 is 

amended as follows: 

PART 225—FOREIGN ACQUISITION 

■ 1. The authority citation for 48 CFR 

part 225 continues to read as follows: 

Authority: 41 U.S.C. 1303 and 48 CFR 

chapter 1. 

225.770 [Amended] 

■ 2. Section 225.770 is amended in the 

first sentence to remove ‘‘Section 1211’’ 

and add ‘‘section 1211’’ in its place and 

add ‘‘and section 1243 of the National 

Defense Authorization Act for Fiscal 

Year 2012 (Pub. L. 112–81)’’ at the end 

of the sentence. 

■ 3. Section 225.770–5 is amended by 

revising paragraph (c) to read as follows: 

225.770–5 Waiver of prohibition. 

* * * * * 

(c)(1) The official granting a waiver 

shall submit a report to the 

congressional defense committees, with 

a copy to the Director of Defense 

Procurement and Acquisition Policy 

(see PGI 225.770–5), not less than 15 

days before issuing the waiver. 

(2) In the report, the official shall— 

(i) Identify the specific reasons for the 

waiver; and 

(ii) Include recommendations as to 

what actions may be taken to develop 

alternative sourcing capabilities in the 

future. 

[FR Doc. 2012–11561 Filed 5–21–12; 8:45 am] 

BILLING CODE 5001–06–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Part 204 

RIN 0750–AH71 

Defense Federal Acquisition 

Regulation Supplement: Contingency 

Contract Closeout (DFARS Case 2012– 

D014) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to require additional planning, 

monitoring, and executing activities for 

contract closeouts when the contracts 

are awarded for performance in 

contingency areas. 

DATES: Effective Date: May 22, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Meredith Murphy, telephone 571–372– 

6098. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD is amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement a 

recommendation made by the 

Government Accountability Office 

(GAO)report 11–891, ‘‘CONTINGENCY 

CONTRACTING: Improved Planning 

and Management Oversight Needed to 

Address Challenges with Closing 

Contracts,’’ dated August 23, 2011. The 

GAO recommended that DoD improve 

contract closeouts when the contracts 

are awarded for performance in 

contingency areas. The GAO 

recommended revising contract 

guidance to enhance advance planning 

for contingency contract closeouts. 

Additionally, the GAO advocated 

including a requirement that senior 

contracting officials monitor and assess 

the progress of contract closeout 

activities throughout the contingency 

operation. 

The DFARS is amended at 204.804 to 

implement key elements proposed by 

the GAO. The head of the contracting 

activity is required to assign the highest 

priority to contracts performed in a 

contingency area in order to reduce 

potential backlogs. Heads of contracting 

activities are responsible for supervising 

the progress of contingency contract 

closeout activities and taking 

appropriate steps if a backlog occurs. 

II. Publication of This Final Rule for 

Public Comment Is Not Required by 

Statute 

‘‘Publication of proposed 

regulations,’’ 41 U.S.C. 1707, is the 

statute which applies to the publication 

of the Federal Acquisition Regulation. 

Paragraph (a)(1) of the statute requires 

that a procurement policy, regulation, 

procedure, or form (including an 

amendment or modification thereof) 

must be published for public comment 

if it relates to the expenditure of 

appropriated funds, and has either a 

significant effect beyond the internal 

operating procedures of the agency 

issuing the policy, regulation, 

procedure, or form, or has a significant 

cost or administrative impact on 

contractors or offerors. This final rule is 

not required to be published for public 

comment because this amendment does 

not relate to the expenditure of 

appropriated funds, and has neither a 

significant effect beyond the internal 

operating procedures of DoD, or a 

significant cost or administrative impact 

on contractors or offerors. These 

requirements affect only the internal 

operating procedures of the 

Government. 

III. Executive Orders 12866 and 13563 

Executive Orders (E.O.s) 12866 and 

13563 direct agencies to assess all costs 

and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). E.O. 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This is not a significant 

regulatory action and, therefore, was not 

subject to review under section 6(b) of 

E.O. 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

IV. Regulatory Flexibility Act 

The Regulatory Flexibility Act does 

not apply to this rule because this final 

rule does not constitute a significant 

DFARS revision within the meaning of 

FAR 1.501–1 and 41 U.S.C. 1707 does 

not require publication for public 

comment. 


srobinson on DSK4SPTVN1PROD with RULES2